Starting a new distillery

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Starting a new distillery

Unread postby bourbonv » Thu Oct 19, 2006 6:24 pm

I have been working on papers in the Taylor-Hay family papers that involve E H Taylor Hay trying to get into the distilling business in the late 1930's and the 1940's. Today I was reading the papers where Taylor Hay looked into purchasing the Sam Clay distillery in Frankfort in the late 1940's. This was a distillery which could produce 65 barrels a day. They included estimates of what it would cost to run for one year and these figures added up to a little over $175,000.00. They estimated that the product produced would be worth about $220,000.00. Sounds good until you realize that production would not really be available for four years and then you had to add the cost of storage. Still a profit could be made, but not much.

Some of the details of cost included labor for the year at about $17,500 total to pay about 15 people. Grain cost would be 65 cents per bushel of corn and rye and $1.00 for malt. Barrels had a cost of $5.50. Needless to say those price were a lot less than today's cost and Taylor Hay never made it into the distilling business.

Today there are a lot of people saying they would like to start a distillery up - get the money together and purchase an old distillery and fire it up. It probably does not make much more financial sense today than it did back in the 1940's. Even if the distillery was "fired up" you would have to then build warehouses if there were none available. Most old warehouses are being used by the distilleries today, so warehousing would be a problem and permit to build warehouses would be harder to get than building a distillery if you are in a city. If an old distillery was fired up here are the ones that are available:

Stitzel-Weller: This distillery has the best chance to become active again as a bopurbon distillery. If Diageo decides to put the money into the distillery, they could make it active again. It has warehouses. They stills, cookers, fermenters ect. are still there. It could be done but only with a major investment. Then you would have the additional cost of brand building because all of the brands were sold to other companies. A Master Distiller would also have to be found or trained.

Medley: Charles Medley owns a very nice distillery in Owensboro. He knows how to make some excellent whiskey. He also has warehouses and a distillery that is in decent shape. I think this distillery is next in line of possible bourbon distilling operations that could come back. He obviously needs money to do so or I think he would be making whiskey there now.

Hill and Hill: This plant in Shively is distilling neutral spirits for fuel today. Many of the Iron Clad warehouses have been torn down, but there are some brick warehouses still standing, but they need a lot of work. If someone wished to purchase this operation, they could make whiskey there.

Yellowstone: Florida distillers tore down most of the warehouses (OK. all but one) but they also invested quite a bit in the distillery building and are distilling there now. I believe they are making citrus based spirit to use as flavoring. If they wished, they could probably use the distillery to get back into bourbon production on a small scale. Warehousing would be a problem.

There are other distilleries that are out there, but not likely to ever see another drop of whiskey produced in their stillhouse. This is mostly because it would cost big bucks to get them in a shape to distill. These include places like T W Samuels, Michter's, Seagram's Louisville. It just is not going to happen.
Mike Veach
"Our people live almost exclusively on whiskey" - E H Taylor, Jr. 25 April 1873
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Unread postby cowdery » Thu Oct 19, 2006 6:59 pm

Add to the list of those distilleries that could be reopened without too much retrofitting Old Grand-Dad in Frankfort, at Forks of the Elkhorn. So far as I know, when Beam bought the place in 1987 they shut it down but didn't dismantle anything. They are using the warehouses and bottling house, but I believe the distillery is more or less ready to go.
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Unread postby bourbonv » Mon Oct 23, 2006 10:18 am

Thanks, Chuck,
I had almost forgotten about this distillery. If Beam ever decides to increase their capacity, this would be their next logical distillery to open. I know that a lot of Old Grand Dad was made there in the past and it was an excellent product.
Mike Veach
"Our people live almost exclusively on whiskey" - E H Taylor, Jr. 25 April 1873
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